Federal-Mogul Holdings Corp., the diversified auto supplier and aftermarket parts producer controlled by longtime Wall Street investor Carl Icahn, said it plans to split its two business units into two publicly-traded companies.

The separation will occur through a tax-free distribution of shares from its aftermarket parts division, which it renamed Federal-Mogul Motorparts in May, to current Federal-Mogul shareholders, the company said in a statement today.

The spin-off of the Motorparts division into a new public company is expected to be complete in the first half of 2015, pending U.S. regulatory approval.

Federal-Mogul began restructuring its aftermarket parts division in 2012. Federal-Mogul historically underperformed in the aftermarket space, which led to red ink, including a $117 million loss in 2012 and a $90 million loss in 2011.

Aftermarket revenue increased only 0.8 percent, and its original equipment sales rose 11 percent, in the first quarter of 2014. Its aftermarket revenue made up 43 percent of its business in 2013, compared to 48 percent in 2002, which may be a problem given the strength of the U.S. spare parts industry.

Icahn, Federal-Mogul's largest shareholder, took action by naming the CEO of his investment firm, Icahn Enterprises, to be CEO of Federal-Mogul's aftermarket and co-CEO of the holding company in February.

Daniel Ninivaggi has spent the last 7 months reorganizing the division for the spin out.

Ninivaggi was tasked with securing a larger portion of the growing U.S. aftermarket business, which includes powerful brand names such as Champion spark plugs, ANCO wiper blades, MOOG steering parts, and Wagner brake products.

The U.S. automotive aftermarket is forecast to grow on an annual rate of 3.4 percent through 2017, according to a joint review by the Automotive Aftermarket Suppliers Association and the Auto Care Association. Total aftermarket sales are projected to grow from $238.4 billion in 2013 to $273.4 billion in 2017, according to the group.

"Upon separation, the newly formed Federal-Mogul Motorparts will have a strong balance sheet with access to large amounts of capital enabling it to pursue synergistic acquisitions in the highly fragmented aftermarket industry," Icahn said in a release. "In addition, the remaining Federal-Mogul Powertrain business will benefit from enhanced management focus and the allocation of resources more directly aligned with its strategic priorities."